Samuel Stebbins and Evan Comen, 24/7 Wall Street
In the United States, the federal government is the ultimate legislative authority — wielding the power to regulate commerce, declare war, as well as establish and maintain a currency. Beyond that, however, the U.S. Constitution grants states considerable leverage in the management of their own internal affairs.
Social and economic outcomes in a given state are often the product of a range of historic circumstances, including — but not limited to — the presence of major companies or universities, natural resources, and prevailing political ideology. While some of these conditions are outside the government’s control, states have the power to plan and react to economic and social conditions through carefully crafted fiscal policies and budgetary priorities.